DEMOGRAPHIC CHANGE AND

DEVELOPMENT

UNITED NATIONS EXPERT GROUP MEETING ON

POLICY RESPONSES TO LOW FERTILITY

NOVEMBER 2, 2015

S. AMER AHMED

DEVELOPMENT PROSPECTS GROUP

• Drawn from Global Monitoring Report 2015/2016

1 GMR 2015/2016GMR 2015/2016

• Demography can identify potential economic

opportunities (and risks)

• These potential economic opportunities divide the world

into centers of global poverty and engines of global

growth

• Policy implications for the low fertility countries:

• Sustaining productivity and adapting to aging (at the country level)

• Leveraging greater globalization (across countries)

Key messages

Using demography to identify economic and development potential

2

Growth of Working-

age Population

Share, 2015-30

Total Fertility Rate, 1985 Total Fertility Rate, 2015

<2.1 >=2.1 <4 >=4

<= 0 Post-dividend Late-dividend

>0 Early-dividend Pre-dividend

Note: The working-age population is defined as the share of the population aged between 15 and 64 years. Total fertility

rate is the average number of births per woman in her lifetime.

GMR 2015/2016

• Demographic dividend

• Age structure changes vary across countries

Potential for demographic dividend parallels demographic transition

3 GMR 2015/2016

0

1

2

3

4

5

6

7

8

9

45 55 65 75 85

Life expectancy (years)

Pre-dividend Early-dividendLate-dividend Post-dividend

Total Fertility Rate

Four groups of countries can be identified based on the opportunities for growth and

development that demographic change presents

Note: Based on data for 2015 from population data from UN WPP 2015

Most low-income countries are pre-dividend while most high-income

countries are post-dividend

4 GMR 2015/2016

The world through the lens of the demographic typology

Centers of global poverty and engines of global growth

5

87 percent of the world’s poor lived in centers of global poverty in 2015

while the engines of global growth accounted for 78 percent of global

economic growth since 2000

GMR 2015/2016

Note: Based on data from Povcalnet and World Development Indicators

Prospects of development and demographic disparities

6

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Pre-dividend Early-dividend Late-dividend Post-dividend

1980-2015

2015-50

Annual growth of population 15-64 (percent)

0

5

10

15

20

25

30

1950 60 70 80 90 2000 10 20 30 40 2050

Pre-dividend Early-dividendLate-dividend Post-dividend

Global working-age population growth will be

dominated by the centers of global poverty

Aging already advanced or accelerated in

the engines of global growth

Share of population, ages 65+ (%)

GMR 2015/2016

Note: Based on population data from UN WPP 2015, medium variant scenario

Demographic change could be drag on growth in low-fertility

countries and subsequently on the world as a whole

7 GMR 2015/2016

Average GDP per capita (annualized) growth over 2015-2030, percentage points

0.8 0.5

-0.2-0.6

-0.3-1

0

1

2

3

4

5

Pre-dividend Early-dividend Late-dividend Post-dividend World

Net impact ofdemographic changeOther sources of growth

2.83.2

4.2

1.62.1

Note: LINKAGE simulation results

Priorities for the engines of global growth

Sustaining productivity growth

• Continued mobilization of

savings for productive

investment

• Ensure public policies across

encourage labor force

participation of both sexes

• Design cost-effective,

sustainable welfare systems

8 GMR 2015/2016

Adapting to aging

• Reform welfare systems for

fiscal sustainability while

ensuring social protection

• Raise labor force participation

rates & productivity of everyone,

at all ages

• Pursue policies that encourage

fertility rebound, including

measures to reconcile childcare

& work

Late-dividend countries with

shrinking proportions of 15-

64 population & aging

accelerating

Post-dividend countries with

shrinking proportions of 15-

64 population & aging well

underway

GMR 2015/2016

Some policies relevant regardless of demographic stage: reducing

gender gaps in labor market

9 GMR 2015/2016

0

20

40

60

80

100

Pre-dividend Early-dividend Late-dividend Post-dividend

Female Male

Labor force participation rate 2010, percent

GMR 2015/2016

Note: Data from World Development Indicators

Leveraging greater globalization

• Many policy priorities focused on harnessing or addressing demographic change

within country

• Scope for leveraging demographic differences between countries for own growth

as well as positive development spillovers

• Migration

• Trade

• Capital flows

• Channels are complementary

• Generally, migration more constrained than trade and capital flows

10 GMR 2015/2016GMR 2015/2016

Thank You

Global Monitoring Report 2015/2015

www.worldbank.org/gmr

Questions or comments?

S. Amer Ahmed

sahmed20@worldbank.org

12 GMR 2015/2016